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Tuesday 17.07.2018 | Name days: Aleksejs, Aleksis
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Economy Minister: Latvian companies should be more like western

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Daniels Pavluts

When introducing changes to the management of state and municipal companies it is necessary to make sure their function is as close as possible to what companies are like in Western countries, Economy Minister Daniels Pavluts says.

In his video-blog, the minister explains that Latvian companies have yet to achieve good management and the progress of the last 16 years has been mostly insignificant.

According to the reforms offered by the Economy Ministry, it is necessary to set a strict procedure of appointing officials to managing posts, because there have been some serious questions raised in regard to the order by which an official is appointed, as well as the transparency of the process, its political nature and the competence of the appointed official.

The minister also offers to settle the company dividends policy, because now every case is resolved differently. The ministry proposes adopting a mechanism that would gather all involved sides in one dialogue. It will allow them to engage in a discussion about the company’s goals and where development money should be diverted.

It is also planned to for every company to develop a medium-term strategy or business plan – coordinate it and make it accessible, as well as have it reviewed regularly. According to the minister, it is necessary to increase company supervision capacity and introduce a new methodology, so that companies would give regular reports about their activities.

“In the West, modern companies work with their sides of influence. If municipality and the state companies could work in such a way in the future, similarly how exchange listed companies do, Latvian taxpayers and the state would gain much from it,” – the minister said.

The Economy Ministry has developed the Public Persons Capital Companies and Capital Shares Management draft law, as well as amendments to five more related laws based on the solution options offered and approved by the Cabinet of Ministry and State Capital Shares Management concept and the Public Persons Commercial Activities concept.

The goal of the draft law is the improvement of public management of companies, by following internationally recognized principles of corporate management.

The Latvian Large Cities Association stands against these reforms. The association believes the state wants to limit the rights of municipalities to manage their property and interfere with the realization of municipalities’ autonomous functions.

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